12 December 2016

We all make mistakes. Occasionally, for some of us, a mistake leads to some sort of “conviction.” A conviction could be the consequences of parking too long in a one hour parking zone, exceeding a highway speed limit, getting in a bar fight, shoplifting some sunglasses, up through more serious offences.

I’ve had clients enter Canada dozens of time, only to be told by the Canada Border Services Agency (CBSA) on the 57th arrival after landing at a Canadian airport, or crossing at a land border, that they’re inadmissible due to criminality. They’re put back on the next return flight from where they just arrived, or told to head their vehicles back in the opposite direction and not return. These are clients who might mostly earn their livelihoods in Canada as sales reps, or have close family in Canada. They’re understandably shocked at being refused entry, especially because some of them have been previously welcomed to Canada so many time with open arms.

The thing they all share in common is one or more “convictions” somewhere in their pasts, sometimes decades previously, and sometimes for acts that aren’t even considered “criminal” where they come from. Section 36 of the Immigration and Refugee Protection Act governs criminal inadmissibility, explaining rather cryptically:

A foreign national is inadmissible on grounds of criminality for

(a) having been convicted in Canada of an offence under an Act of Parliament punishable by way of indictment, or of two offences under any Act of Parliament not arising out of a single occurrence;

(b) having been convicted outside Canada of an offence that, if committed in Canada, would constitute an indictable offence under an Act of Parliament, or of two offences not arising out of a single occurrence that, if committed in Canada, would constitute offences under an Act of Parliament;

(c) committing an act outside Canada that is an offence in the place where it was committed and that, if committed in Canada, would constitute an indictable offence under an Act of Parliament; or

(d) committing, on entering Canada, an offence under an Act of Parliament prescribed by regulations.

However, there is a get out of jail free card available if the Minister deems that you’ve been “rehabilitated.” The problem is that it can be very difficult for those visiting (or moving to) Canada to know (1) whether the thing(s) they’ve done in the past are caught within the criminal inadmissibility drag net, and (2) even if they are caught up in inadmissibility, can they be considered to be rehabilitated?

One of the most problematic offences is impaired driving (DUI). In some countries, it is considered a regulatory highway traffic offence, and not a criminal offence. And even where it is a criminal offence, a person might not have been formally “convicted” of it. And further confusingly, while DUI is usually prosecuted in Canada as a summary conviction offence, because at the Crown’s election it can also be prosecuted by indictment it means that a single DUI can make you criminally inadmissible.

But there is a fix to all of these problems: criminal rehabilitation. It’s an application process which demonstrates to the Canadian government that because of the passage of time since your conviction, and because of your having stayed out of trouble since that time, you shouldn’t be excluded from Canada. It’s akin to an immigration criminal pardon! I’ve also found that unfortunately sometimes the CBSA makes mistakes, and declares criminally inadmissible people who don’t at all fall within that category, but you may still need a lawyer to correct that mistake.

While there are certainly some immigration procedures that you might try to undertake yourself, I urge you to retain a lawyer to assist with criminal rehabilitation. You might even need two lawyers - one from your home jurisdiction where the offence was committed and one in Canada - to deal with the translation of the foreign conviction into Canadian legal terms. This isn’t always necessary for countries having similar legal systems to that of Canada, like the United States, but your Canadian immigration lawyer can discuss the precise procedure with you depending on your circumstances.

Generally the rehabilitation process involves you gathering together your prior conviction information, having criminal record checks done in every jurisdiction you’ve lived for a significant time, and then a Canadian lawyer will present your rehabilitation application to the Canadian government. Some applications are more straight forward than others, depending on the number and severity of prior convictions, and how much time has passed since those convictions. You’ll usually be barred from Canada until your application has been reviewed, so the sooner you undertake the rehabilitation process, the faster you’ll have a chance of reentering Canada.

And don’t wait until you’ve been barred from Canada to start this process. If you have an upcoming visit to Canada, and have prior convictions, consult a Canadian immigration lawyer prior to your visit about whether a criminal rehabilitation application might be necessary. Even if you've been entering Canada repeatedly without a problem, don’t be lulled into a false sense of security as I’ve had clients who haven’t had entry problems for years who suddenly are banned from Canada for a year or more while we sort out the inadmissibility issue; just because the CBSA hasn’t stopped you yet doesn’t mean that a new officer won’t take a different view of your past, and doesn’t mean that the CBSA won’t sign a new information sharing agreement giving it greater access to foreign criminal background data which might include your name.

Neither the CBSA nor the Department of Immigration, Refugees and Citizenship can give you legal advice on criminal inadmissibility. It’s one of the most complicated areas of immigration law because of the need to compare two different legal systems to see how a conviction in one system might match up with available offences in another system. So I do urge you to consult a lawyer prior to travelling to Canada so that you aren’t frustrated in work, family or tourism trip where you will have invested lots of time, planning and money. I likewise frequently refer Canadians to U.S. immigration lawyers to deal with criminal admissibility when travelling south.

25 October 2016

Reason #1: It's the law in Ontario to have a lawyer represent you. It's not a scam by lawyers to make business for themselves. The law of Ontario requires that every buyer and every seller of real estate be represented by their own lawyers (unless the area is remote, where one lawyer might be able to do both sides of the deal). It's true that lawyers aren’t required to be involved in every real estate transaction in a lot of other jurisdictions. But if you consider that real estate is likely the most expensive thing you'll ever buy in your life, unless you're really into rare luxury cars or mega yachts, then the fact that you'll be paying a fraction of a single percent of the purchase price in legal fees seems sensible if it protects your investment. Believe it or not, lawyer do stuff on a real estate deal beyond print out a lot of paper that you're required to sign.

Reason #2: There may be legal problems with the title to the property. Most people now hire home inspectors to check out their dream residence for fatal building flaws. Your lawyer is there to help minimize nasty surprises over fatal legal flaws. Like that there's a registered right of way for an oil pipeline through your backyard. Or that half the garage that comes with the property is actually located over the neighbour's lot line. Or that two liens for non-payment of large debts are registered against the property.

Reason #3: You need to borrow money to buy the property. Very few of us are able to pay cash for real estate, unless we're buying bare land or a really run down house in a very cheap location. But anyone lending you a large sum of money to buy a property is going to want to register a mortgage against the property to secure the debt. And placing a mortgage on a property requires a lawyer, in part to make sure there aren't other priority claims already registered against the property in which case your lender might not be willing to lend, or might only lend at a much higher rate of interest if it doesn't get first priority against the property.

19 July 2016

There
comes a time in all our lives when we receive some kind of official
pronouncement that we disagree with. Being rejected for a licence or permit.
Being told that we don’t have the rights we thought we had. Losing in a civil
money dispute, in family court, or even at a trial for a criminal or regulatory
offence.

We
might find the result hurtful and unjust. We might be outraged. And we might
remain firm in our convictions over the justness of our cause!

Some
will just swallow the defeat and move on. But others will want to continue the
fight.

Most
of the world’s legal systems have created fairness check mechanisms on first
level decisions, regardless of who is making the decision or what subject the
decision relates to. The buck almost never stops with the government desk
officer, the hearing tribunal, or the trial judge. At least one level of appeal
of an adverse decision is almost always possible if you look hard enough for an
appeal route.

A
psychologist could probably give you a helpful take on the emotional toll that
fighting on entails, and what kind of person is more likely to continue to
fight rather than throw in the towel. But my professional focus is solely on
whether and how the continued fight can be won.

In
the over two decades I’ve been helping clients with appeals (and watching
others by necessity or choice represent themselves), I’ve seen lots of missed
opportunities for winning appeals because of deadly but completely avoidable
mistakes that people make shortly after receiving that decision they want
desperately to overturn. Here are a Canadian appellate lawyer’s insider tips
for five things you should never do (and I frequently see done again and again)
if you want to continue the good fight, which should help you out regardless of
where you live.

1. BE LATE TO THE
PARTY. It
doesn't matter how great your arguments might be; if you're late on an appeal,
you're almost always out of luck. And some appeal filing periods can be crazy
short. Like 7 days from the decision. Usually you've got 30 days; occasionally
as long as 90 days. In that time, you’ll need to find a lawyer (or figure out
the process yourself), get a copy of the decision and the materials that were
reviewed in making it (you might need to order transcripts or request
government records), draft plausible grounds for appeal, track down the
responding party to serve the appeal notice on, and file the notice with the
office, tribunal or court hearing the appeal.

2. GET LOST FINDING THE
PARTY. There
are more places out there to appeal to than you might expect. In federations
like Canada or the U.S., you need to figure out if you’re going to a
provincial, state or federal appeal body. You might also need to determine if
you’ve got a final order or interlocutory (interim) order, as believe it or not
their respective appeals might go to different places. After being late,
appealing to the wrong place is probably the most common completely avoidable
reason for failed appeals. I’ve seen enough lawyers get the appeal route wrong.
Sometimes, even the courts themselves disagree over which one of them should be
hearing an appeal!

3. THINK IT'S SIMPLY ANOTHER
KICK AT THE SAME CAN. The time to make your best pitch is with the first instance
official, tribunal or court. Appeal bodies love the word “deference” to lower
officials, and will liberally use that word against you if you don’t give them
very good reasons why they should overturn a lower decision. You can’t usually
appeal errors of fact, only errors of law (though it’s possible to turn big
enough factual errors into errors of law). So it’s deadly to try to appeal on
the basis that you think a decision is merely wrong, stupid, or misguided. Even
if the person you’re appealing to is inclined to agree with you, she can’t
simply substitute her own decision for the decision of the lower official.
There has to be some kind of significant legal error you point out that is
worth interfering with.

4. ASSUME YOU'VE GOT AN EVEN
SHOT. Casino
gamblers and appeal gamblers both sometimes suffer from magical thinking on
odds not rooted in reality. And while its easy to get stats on roulette with a
double zero having a 5.26% house edge, it’s a lot more difficult to pin down
precise odds on appeals. They’re definitely less than 50-50. Your best shot at
winning is always at first instance - when you originally submit that government
form or appear before that tribunal or trial court - not on appeal. In Canada,
the odds of getting some kind of remedy out of an appeal are probably somewhere
between 1 in 3 and 1 in 4, based on available appellate court data. If the
stakes are high, those aren't such bad odds. But if you're fighting about
a minor issue, you need to reflect on whether the financial and emotional cost
is really worth it.

5. ONLY MAKE ONE
ARGUMENT. You might think you've found that one killer, slam dunk argument
for an appeal. The one that no one could reject. But not everyone sees the
world as you do. So even if a reviewer has sympathy for your cause, she may not
buy your one argument wonder. Come up with more. I often come up with a dozen
or more possibly viable grounds of appeal for clients. Sometimes we whittle
that number down a bit for the actual appeal argument, but which of those
arguments appeal officers and judges seize on as the winning strong argument
continues to surprise me, so it never pays to limit your arguments other than
eliminating the ones that stand no chance of success.

29 May 2016

We're usually completely blind to who our neighbours will be, or who we'll be renting property from, until we've moved into a house or apartment or business premises. And by then, it's too late too avoid the neighbours or landlord from hell.

There are 4 key legal steps you need to take to survive and thrive in a neighbour or landlord dispute over your property, regardless of whether you're an owner or renter.

Step One - Don't Escalate Too Quickly

As tempting as it might be, don't escalate the dispute by involving lawyers too quickly. This is the opposite of what I'd suggest in some other legal dispute situations like being charged with an offence or being sued. The reason to control escalation to the greatest degree possible is that most property dispute cases can be resolved with a little common sense. This isn't the case with lots of other types of disputes.

Embrace the "good neighbour principle" that anything you do on your property shouldn't harm your neighbour/landlord and his property, and insist upon your neighbour/landlord according you the same respect. Don't cut down your half of a tree on your property if it will kill the remaining half tree on your neighbour's property. Don't build a wall that will completely block all light to your neighbour's property. Don't aim an exhaust chimney directly at your neighbour. Don't make so much noise, at all times of the day and night, so as to drive your neighbour crazy. Don't make massive modifications to your rented premises without talking first to your landlord about the changes.

You might need to do some of these things in moderation in order to make proper use of your property, but showing the greatest restraint possible, and talking to your neighbour/landlord first, is most likely to avoid you being dragged to court and incurring legal expenses.

All these property owner/renter actions I've just mentioned have ultimately wound up in court. Some have spawned many court cases. But at the end of the day, judges have usually granted judgment in favour of the reasonable party and against the unreasonable party.

Step Two - Hire a Lawyer Instead of Self-Help Revenge

If your neighbour or landlord refuses to act reasonably, after you've tried to reason with him or her, then it's time to talk to a lawyer so you can better know your rights, and perhaps have your lawyer talk to your neighbour or landlord's lawyer.

This is NOT the time to engage in self-help, and get revenge against the unreasonable person. You won't be doing yourself any favours if the matter later winds up in court through your acts of self-help revenge - even if they feel very good at the time.

So cutting down your neighbour's tree after he cut down your tree, flooding your neighbour after she flooded you, breaking into your rented premises after your landlord locked out all need to be resisted. Instead, hire a lawyer and sort it out through negotiation or in court. That's the only way to get a permanent fix.

Your lawyer will tell you what you can permissibly do in the interim. The other way of self-help is a path to police involvement. And trust me, you don't want that. I've seen it often enough, and it ain't pretty.

Step 3 - Document, Document, Document

Property disputes are a whole lot more tangible than other kinds of disputes. You can touch property. You can feel the earth being fought over beneath your feet. Touch the wall that your neighbour should never have built across your driveway. Smell the absence of that tree that should have never been cut down. Finger the padlock that should have never been placed on the front door of your business.

As a result there are usually lots of documents and photos that you can create or gather to demonstrate to a court why you're in the right and your neighbour or landlord is in the wrong. Step 3 involves painstaking gathering of evidence. Avoid she said/she said competitions of credibility, and focus on absolute truths that you can prove through hard evidence.

Take lots of photos - preferably before and after the start of the dispute. Pull out a survey or commission a new property boundary survey. Dust off those land title or lease documents, or have your lawyer conduct a diligent title search for you. Make some videos. Write out an extremely detailed chronology of events and give it to your lawyer - the more dates, names, places and details, the better. Collect witness statements. Your lawyer will probably want to draft up a sworn affidavit for you for later presentation to a court, attaching lots of exhibits, and will need lots of provable detail to create a compelling affidavit.

STEP FOUR - Figure Out Your End Game Early

Think carefully early on in the dispute about your end game and what you will settle for out of the property dispute. Avoid demanding monetary damages if you're in court - they'll trap you into a lengthy trial of proving who owes who what, and how much is owed. You could be stuck in court for years, and the legal fees could outweigh any damages that are ever awarded. And then you might find collecting those damages to be impossible.

Ask yourself: what will best restore me to the position I should have been in? New trees? An adjusted property line? A quieter neighbour? A landlord who leaves me alone to run my business? Then work with your lawyer to figure out what legal means will get you to that point of resolution.

Your life working with a barrister can be productive or it can be miserable. In this post I'll explain to you the four steps you need to follow to make the relationship the former and not the latter.

It doesn't matter if you're being dragged kicking and screaming to court in response to a criminal charge, small claims or Superior Court of Justice civil suit against you or your business, are trapped in family law proceedings, or maybe you need to initiate a court application to clarify your rights over real estate, or the interpretation of a will, or recover money from someone. Unless you're planning to do that case yourself - and in over two decades of practice I usually don't see good outcomes for those who try the DIY route - you'll be stuck working with a barrister.

In Canada, barristers are simply lawyers who go to court. Unlike in England, they're part of the same law societies as solicitors. While we've never worn white horsehair wigs - I've heard they were too difficult to obtain in colonial times - we do sometimes wear black robes that have a habit of getting caught on door handles as we attempt to swish imperiously in and out of rooms.

Step One - Be Sure You Need a Barrister

Clarify at the start of the relationship why you need the barrister. Many people come to see me thinking they might benefit from a lawyer, but are not quite sure what the lawyer can do for them. I always tell my clients that a little legal advice can be a bargain. But going to court unless you absolutely have to go is never a bargain.

So before you contact a barrister, consider why you need one. And then when you do speak to the barrister, explore upfront exactly how he or she might be able to help you.

Don't accept vague answers from a barrister about his or her plans to help you. Instead, push the barrister to explain step by step what his or her plan is for you.

You might not really need a barrister. And it could be worth a free five minute phone call to find that out or a one hour paid consultation with a lawyer. Even if you pay up front for a bit of advice on your matter, possibly including asking the barrister to write you a formal legal opinion about the likely prospects of success of your case in court, it will still be way, way cheaper than starting to spend money on court fees once litigation has started.

You might need a psychologist or family therapist or credit counsellor or accountant more than a barrister. If you've got a neighbour dispute, you should weigh the expense of a real estate agent versus a barrister. Family counsellors for marriage troubles are definitely cheaper than family lawyers. I'm not suggesting other professionals can definitely fix your problems, but they might provide a more graceful exit to them than would litigation.

However, sometimes going to court will be the only option. Like if you've been charged with a criminal offence. Or if you are being sued by someone else. Or if you have a tax dispute with the government.

Step Two - Clarify the True Cost of the Barrister

Demand up front from the barrister a fair assessment of fees for your matter, and in turn be prepared and realistic about your ability to fund those fees. Push the barrister for a block fee if possible, even if it's only for specific stages of a case, as that will best control and predict your costs.

If fees need to be hourly, make the barrister explain why. And don't make the mistake of thinking a lower hourly rate will lead to a lower cost of the case, since a cheaper by the hour barrister might have less experience, and consequently wind up spending more time on your case.

Also don't be shocked by barrister fees. Many solicitors actually take home more money than barristers, but people usually don't complain about their seemingly "smaller" fees which are based on volume and where much of the work is being done by trained clerks. By comparison, barristers will be doing most of your work themselves, and court cases tend to suck up an enormous amount of lawyer time as compared to a simple real estate transaction which a lawyer might only personally spends one or two hours working on.

If you can't afford the fees, tell that to the barrister upfront. There may be less expensive ways of proceeding available, even if they're not the preferred ways of proceeding. Don't mislead yourself about being able to afford a potentially very costly case because you think it will settle. You always need to plan for the worst case scenario when it comes to litigation.

Regardless of whether the fees are block or hourly, don't let the barrister be vague about how extras like "disbursements" can drive up those fees. Establish at the start if there are likely to be significant disbursements like transcript costs, expert witness fees, or printing and binding fees.

A rule of thumb is that criminal cases tend to be cheaper than civil cases - even small claims - because they simply take up less barrister in-court and preparation time, settle at earlier stages, and involve fewer pre-trial proceedings. You'll usually be able to get a block fee from a barrister for a criminal case, but civil cases will usually be hourly because they're less predictable.

Costs of appeals for civil or criminal cases depend upon the complexity of the trial; a four week trial with 500 exhibits is going to cost more to appeal than a one day trail with five exhibits. But you may be able to get a block fee quote for an appeal - all the appeals I take on are done as block fees.

Step Three - Work Collaboratively with the Barrister

Press the barrister from the start of the relationship on what he or she needs from you. You giving the barrister appropriate help from the get go will make the relationship far more successful and cheaper for you.

Does the barrister want a factual chronology? A list of witnesses together with their addresses and phone numbers? Copies of possible court exhibits, including photos? You won't be able to anticipate all barrister needs, so ask. If you're having trouble getting direct answers on needs from the barrister, press the barrister's law clerks for what kinds of things they usually collect for cases. You need to work collaboratively with the barrister.

Your physical health is a collaborative endeavour with your family doctor. Same with you legal health.

Don't make the mistake of thinking that your only obligation in working with a barrister is paying the bills. Really your barrister is more of an interpreter or negotiator or intermediary between you and the court; your barrister isn't your replacement or doppelgänger. Making your barrister relationship the most result and cost effective possible requires your full participation in the case.

Step Four - Continuously Evaluate What Would be an Acceptable End Result

Evaluate in advance of retaining the barrister, and continuously reevaluate during the course of your barrister-client relationship, what would amount to an acceptable court result or end game for you. Don't enter the relationship with vague notions of "total victory" as even if your barrister gets you to that point, you might might be capable to recognizing it after you've been in the court process for a while. So be realistic in your court outcome expectations, and continually examine the options you're presented with for getting off the litigation treadmill.

In criminal cases, an acceptable result might be easier to evaluate than for civil cases. If you don't have a criminal record, and want to avoid one, a good result might be diversion or receiving a discharge, in addition to dropping of charges or an acquittal. If you do have a criminal record, but need to avoid going to jail so you can keep your job, then staying out of jail through a community based house arrest sentence might be acceptable.

I'm not saying you can't aim higher than the minimum acceptable result, but just that you need to consider your options from the start. It might take you weeks of careful reflection to figure out what result you really want. You'll have the necessary time to reflect if you consider things from day one of the barrister-client process. You might only have 24 hours to decide on a deal once a firm offer is made. If you really didn't "do it" in a criminal case, then make clear up front to your barrister that the only acceptable result to you is full exoneration. That way he won't waste his time trying to negotiate a deal for you, but rather will first try to convince the Crown the drop the charges, and second will simply prepare to take your case to trial.

In civil cases, an acceptable result might be more intangible. One result to consider is that you don't want to spend more on barrister fees than you save in settlement payments. As much as you don't want to give the other side a penny of your hard earned money, a good barrister will be frank with you about when your legal costs will outweigh your potential civil windfall.

For instance, if hire a lawyer to sue someone in small claims court for $5000 in damages, get a judgment for $4000, get $750 in court costs, and pay $5000 in legal fees, and you'll be $250 poorer than when you started. But get a judgment for $20,000 with $3000 in court costs, and you'll be $18,000 ahead on that same $5000 amount of legal fees. So for civil matters, you need to be really careful in evaluating how much your case is worth - regardless of whether you're the plaintiff or defendant.

Anytime legal fees could outstrip case worth, that is a huge red flag. People often get sucked into spending stupid amounts of money on barristers because the expense doesn't seem too bad to start with, they're overly optimistic about how quickly they can achieve victory, and they don't press their barrister sufficiently for the worst case scenario.

But there are things worth fighting for, even if fees climb. For the control and survival of your business. To be able to continue to practice your profession. But just be realistic about what you can live with, based on asking your barrister about the likely outcomes. If your barrister refuses to discuss this with you, find another barrister. But because your barrister may have hundreds of clients, don't expect him to be able to pry out of you what you really want, and to read your mind, if you don't tell him.

The longer you're in business, the greater the chances you'll be sued by someone who is disgruntled. This might be a disgruntled former employee, a disgruntled client, a disgruntled competitor, or even a disgruntled partner.If you've survived in business for more than a few months, you've hopefully moved past dwelling on the possibles, and only deal with the realities. So while all those people could sue you, fortunately few ever will. It can be very hard to predict from what quarter the litigation will come, but there are a few important proactive mitigation steps you can take to protect your business and yourself from such suits.1. Incorporate and Buy Sufficient InsuranceIncorporation and insurance aren't either or propositions, but they are most effective when used in combination. For really small businesses, the cost and hassle of incorporation (like preparing financial statements and filing corporate tax returns) may not be worth the benefit. Insurance has its limitations as well, but for professionals who can't shield themselves from legal liability through a corporate veil adequate insurance is an absolute necessity.Be aware that incorporation is not an absolute shield to personal liability, especially when you have a "closely held" corporation with only a couple of owners and directors as is the case for many small businesses. You still might get sued personally, and court decisions are inconsistent on whether individuals should be let off the hook for actions or debts of corporations. The Income Tax Act can be especially onerous in pursuing directors and owners for tax corporate debts. But having a corporation operate as an intermediary between you and your customers and suppliers is usually a good thing once your business gets to a sufficient size.There's a tendency amongst both businesses and professionals to be underinsured, as people don't count on the high cost of legal defence eroding damages policy limits. Get a $1 million policy, spend $500,000 on defence costs, and you don't have a lot of insurance left. So buy excess coverage where available and affordable.2. Carefully Document Your Business Relationships with Defencible WordingMany business people think themselves smart by committing all relationships to writing through employment contracts, purchase contracts, and partnership agreements. But if you draft abusive and vague agreements, they may be worse than not having anything at all in writing because those unfair agreements can turn a court against the party who drew up the lopsided written document.Employment contracts that effectively prohibit former employees from working anywhere in the same field for years locally or nationally, purchase contracts that absolve the vendor of all liability for products or services sold, and partnership agreements that lock partners into a marriage with no escape until death can all be worse than no written agreement at all as courts may unpredictably strike down various agreement clauses as unconscionable, while leaving other clauses in place that create a two legged table that tips over but can't be predicted where it will fall.Instead, get a lawyer's help drafting something that will later stand up in court. Taking a "we'll leave it to the courts to sort it out" attitude, be it lawyer or business owner who is drafting the document, will only cost the business in the end with litigation legal fees that will be many times greater than the fees charged to draft the original contract. I'm not saying an agreement can't tilt slightly in your favour and still be upheld by a court. But there is an indistinct line of unreasonableness that can't be crossed, and which you must carefully consider.3. Defuse Business Conflicts Prior to their Escalation to LitigationWhile keeping employees, clients, suppliers and partners happy - within reason - might seem self-evident in avoiding litigation, many businesses violate this rule, and later pay the price in litigation costs. Taking the employee/client/supplier/partner is always right approach will not solve all your problems; I defend businesses against what can only be called frivolous and vexatious lawsuits that should have never been initiated, even after my clients have attempted reasonable accommodation. But at least some suits will melt away before they are filed if sufficient communication and moderate appeasement is offered to the other party. This will usually save you money in the long run, especially if you couple those measures with ensuring that complaining party signs an informed release of liability in your favour. However, simply giving in to the other party without getting anything in your return might not be in the best interests of your business.4. File a Timely Defence, Consider Early Settlement, move to Strike Parties, move for Security for Costs, or move for Summary Judgment when you Do Get SuedIf and when you do get sued, in Ontario you usually only have a short twenty days to draft, serve on the opposing party, and file with the court your defence! That time limit can be extended through various means, but you really need to contact a lawyer immediately upon receiving a claim so that you can understand your rights and the right of your business.Even if you're only getting sued in Small Claims Court for $25,000 or less, I generally don't recommend people represent themselves because of the complexities involved. If you win, you're able to claim legal costs of up to 15% of the value of the claim (under Ontario rules), so you can recoup some legal fees.It's clearly pointless to spend more on legal defence fees than the value of the claim, but it's still worth consulting a lawyer to determine likely fees and whether it could be advisable to self-represent. If being sued in Superior Court outside of the Small Claims realm the Rules in Ontario require all corporations to be represented by a lawyer except with explicit permission of the Court.You need not feel that you're trapped into some multi-year court process if you move proactively when you do get sued to consider one of the following four options.a. Consider Early Settlement - if settlement costs will be way cheaper than legal fees, consider it a cost of doing business to buy your business out of the court case, even if you think you're in the right, so long as you get a solid release of liability, and aren't facing similar claims from others where there would be value in setting a court precedent.b. Move to Strike Parties - if you or your business have been named as peripheral parties in a multi-party lawsuit, or you've been named personally as a party that should only have been brought against your corporation, discuss with your lawyer whether a motion to strike you or your business as parties from the suit might work. Motions are cheaper to bring than being subjected to a trial, and if a motion can effectively kill off a case for your business, or at least protect you personally from a judgment, then it might be worth bringing.c. Move for Security for Costs - if you or your business are being sued by an organization or individual with no assets in Ontario (or whatever province the lawsuit has been initiated in), you might be able to move for "security for costs." This involves the plaintiff being compelled to post a bond with the court which could compensate you or other parties for some of your legal fees should the plaintiff have costs awarded against it. This might stop a lawsuit in its tracks if the plaintiff is unable or unwilling to deposit the funds with the court.d. Move for Summary Judgment - it's recently become quite trendy (after the stamp of approval from the Supreme Court of Canada) to successfully move for "summary judgment" as either plaintiff or defendant in order to shorten the trial process. Such motions can still take up several days of court time, and have specific criteria for success, so you should carefully discuss costs and prospects with your lawyer before such a motion is undertaken, but if there is a reasonable chance of success it might significantly shorten your time and costs in court.

15 April 2016

Demanding that even lower or mid-level employees sign written employment contracts seems to have become all the rage over the last few years. In the past, such agreements were usually limited to senior managers or executives. In theory, there's nothing wrong with employment agreements for everyone at a business if they helpfully clarify the mutual obligations for both parties. Certainly specifying pay levels, hours and duties of work is always helpful in avoiding misunderstandings. But what isn't helpful is inserting abusive and legally defective non-competition clauses that seek to prevent a departing employee from earning a living in his or her field for the foreseeable future. I write this as a lawyer who more often acts for employers, rather than employees. I tell my employer clients that it's pointless to pay a lawyer to draft up an employment agreement which no court in Canada will ever enforce because of its abusive terms. The difficulty with a lot of these agreements is that the valid clauses state the obvious that doesn't really need to be stated - like don't steal our intellectual property - and the parts that aren't obvious - like you can't effectively work in your field anywhere in Canada (or anywhere within 100km) for the next year (or two years or three years) - are so abusive that they might invalidate the entire agreement, especially if they're combined with other abusive clauses. As an advisor to employers, the last thing a company wants is a court binning the entire agreement. For instance, I recently came across an agreement with wording similar to the following: "You agree that during the term of this Agreement and for a period of one (1) [why do lawyers so love to repeat words with numbers?] year after any termination of this Agreement, whether voluntary or involuntary, you will not, directly or indirectly, for your own account or on behalf of any other party, solicit, contact, contract with, supply, provide services for, do business with, or take any other action designed to procure business from any person, business or company who you solicited on behalf of ...., or with whom you did business on behalf of ...."So what does a clause like that mean? I have no clue, and probably a court won't either. Is it a non-solicitation clause? Is it a non-competition clause? The sentence structure is so tortured, replete with so many commas, it's hard to know what it means. And I do spend a lot of time thinking about these things. Can a new employee really be expected to voluntarily consent to a clause like that in an informed way? How about this even more outrageous clause: "You have carefully considered the nature and extent of the restrictions upon you and the rights and remedies conferred upon ... by this Article, and you hereby acknowledge and agree that the same are reasonable in time and territory, are designed to eliminate competition which otherwise would be unfair to ... and are fully required to protect the legitimate interest of ... and do not confer a benefit upon ... disproportionate to the detriment to you." Really? The drafting lawyer actually expected a reviewing court to buy that "carefully considered" crap? This clause seems to suggest the earlier clause really is a non-compete, and not a non-solicitation. And how are we to believe that a little competition would be "unfair"?You sell a business to someone for a million dollars, it's an agreement between equals. And it's completely fair for the buyer to demand a non-compete for a set time and territory to ensure you won't simply set up the same business across the street. Occasionally senior executives execute non-compete clauses in exchange for multi-million dollar golden parachutes. Nothing wrong with that. But to say to a mid-level employee: "we can fire you any time we like, and you won't be able to work for anyone else in your field," is ridiculous. I'll give you one last example of the most ridiculous, wordy clause of all: "You agree that the remedy at law for your breach of the foregoing provisions will be inadequate, and ... shall be entitled to both temporary and permanent injunctive relief (without notice or bond) enforcing such provisions, in additional to any other remedy it may have at law or in equity."What does this mean? That they can throw you in jail for earning a living? Take away your birthday? And not give you notice of doing so? The moral here is for employers to closely question their lawyers when they ask for employment agreements to be drafted. Can you guarantee me that a court will uphold this agreement? If you have doubts, why? Are there ways we can improve our agreements that will make them more defensible, and easier to enforce, in court. The message for employees is that I know you're going to keep signing these kinds of abusive agreements because you need a job. Take some comfort in the fact that the more abusive the agreement, the more impossible it will be to enforce late. But do get some legal advice before you part ways with your employer, in case there is a chance some of the agreement might stick.